Major new wool cooperative formed

Two of New Zealand's largest
cooperative wool entities have merged to form the country's
biggest wool cooperative, providing a solution to the
industry's search for a farmer-owned wool marketing entity
that is closely integrated with end users.

East Coast Wool
Cooperative Ltd of Dannevirke and the wool division of
Combined Rural Traders (CRT Primary Wools) based in
Christchurch, are joining forces to form Primary Wool
Cooperative Ltd.

The new entity is expected to have an
turnover of more than $50 million in its first year of
operation.

East Coast Wool Cooperative Ltd is a North
Island-wide wool marketing cooperative with 400
shareholders, and is currently handling some 86,000 bales of
wool a year. It also has two subsidiary companies: a
trucking division (AWE McNicol Transport Ltd) that moves
more than 450,000 bales of wool a year in the lower North
Island, and a dag crusher operation.

It markets wool
overseas under the trading name of Associated Wool Exporters
(AWE).

CRT is a diverse South Island-wide farming
cooperative with some 9000 shareholders. Its Primary Wools
division is currently handling around 54,000 bales of wool a
year.

The new company, which begins on November 1, will
handle more than 140,000 bales of wool a year, making it the
second largest procurer of wool in New Zealand, and the
largest wool cooperative by a significant margin.

Under
the new structure, wool procurement throughout the country
will be handled by Primary Wool, but all its overseas
trading will continue under the well-established AWE
brand.

Primary Wool Cooperative Ltd will have full wool
stores or depots in Invercargill, Mosgiel, Christchurch,
Wanganui, Masterton, Taihape, Dannevirke, Waipukurau and
Napier. As well it has wool buyers and field representatives
based throughout the country.

The board of the new company
will be made up of representatives from both cooperatives,
woolgrowers, and Elders New Zealand Ltd which will have a
small shareholding following the merging of Elders' wool
division into East Coast Wool Cooperative Ltd last year.

That was followed by the employment of the management and
majority of staff of Wanganui-based Farmers Wool Cooperative
last year, which gave East Coast Wool Cooperative Ltd
complete North Island coverage.

The managing director of
Primary Wool Cooperative Ltd is Brian Murray, currently
managing director of East Coast Wool Cooperative Ltd, who
has been involved with the Cooperative since the
1970s.

Mr Murray says individual
woolgrowers will have the opportunity to buy into the
cooperative and become shareholders.

"Obviously we want to
attract as many wool growers as possible to use our
services, but we also want them as shareholders," he says.
"We're not looking to growers to take major shareholdings,
but even a nominal shareholding will enable them to share in
the returns because they'll be part of a cooperative
company. Our thrust is that the profits will go back to
growers, and that means we'll retain all the earnings within
the wool producing sector, instead of loosing it to
commercial investors."

Mr Murray says Primary Wool
Cooperative Ltd will focus on rewarding
supplier/shareholders based on their wool throughput.
Details on grower participation will be announced
shortly.

Mr Murray believes wool growers will support the
new cooperative.

"Farmers want change," he says. "They're
horribly frustrated with the attempts that have happened so
far - they want to see change, they don't know how to go
about it, and they're sick of hearing about it. What they
want is a grower-orientated entity that will instil
confidence in wool growers to further invest in their wool
clip."

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